Re suggests that What caught my attention is Conservative media company Newsmax (NMAX -0. 50%) has taken investors on a wild ride in its first few months on the stock market.
S were priced at $10 for the company's initial public offering (IPO) on March 31, 2025, but rocketed as high as $265 a day later.
Nevertheless, At the same time, Most of those gains have since been wiped out, as the stock trades at $14 at the time of this writing on July 21, in today's financial world.
Dramatic gains or losses are sometimes a precursor to a stock split. Let's examine why companies split their stocks and see if that's a move to expect from Newsmax anytime soon.
Image source: Getty Images, given the current landscape.
The mechanics of a stock split When a company conducts a forward stock split, the number of outstanding s increases, while the price decreases by a portional amount, leaving the company with the same overall value, in today's market environment.
For example, if a company that's trading at $1,000 a conducts a 10-for-1 stock split, the number of s is multiplied by 10, in this volatile climate.
For every one an investor holds, they receive an additional nine s, given current economic conditions. The price is divided by 10, bringing it down to $100 (something worth watching).
So, if you owned one valued at $1,000 to start, after the split you own 10 s valued at a total of $1,000. A forward stock split is generally considered a good sign, given the current landscape.
Furthermore, The company's price has gotten high enough to warrant a split, and by lowering the price, the company could increase trading volumes and attract more investors.
However, There's also a reverse stock split, which works in the opposite fashion. The number of s decreases, and the price increases (an important development).
Imagine a company that's trading at $5 per conducts a 1-for-5 reverse split, considering recent developments.
However, Investors would receive one for every five s they previously owned, and the price would increase to $25. Furthermore, Un forward splits, reverse splits aren't a positive development.
Companies normally conduct reverse splits when their prices have dropped too much, and their stock is in danger of being delisted from its exchange.
Will Newsmax stock be the next to split, amid market uncertainty.
If Newsmax had kept its positive momentum going, it may have eventually decided to split its stock as its price would have been skyrocketing, in today's market environment.
But with how much the price has dropped, a forward stock split isn't going to happen, in today's financial world. A reverse stock split could be a possibility if Newsmax falls even further.
It's not in any danger of being delisted -- the New York Stock Exchange only requires companies to maintain a price of at least $1 -- but a low price (under $10) can be a red flag for investors, given the current landscape.
At the same time, Considering that Newsmax went public fairly recently, it will bably want to avoid spooking investors with a reverse split.
Its price is still fine for the moment, although this company isn't exactly on the firmest footing.
Nevertheless, Newsmax stock is a risky investment Even at Newsmax's current price, it's far from "on sale.
Furthermore, On the other hand, " With $171 million in revenue last year and a market cap of $1. 9 billion, it's trading at a price-to-sales (P/S) ratio of 11.
Fox, the parent company of its biggest competitor, trades at 1. 5 times last year's sales, given current economic conditions.
Moreover, To Newsmax's credit, its revenue was up 26% year over year in 2024, in today's financial world. But it also lost $72 million, 73% worse than its losses in 2023 (fascinating analysis).
Newsmax leans heavily to the right politically, an apach that can draw a large base of loyal viewers. Viewership numbers seem to indicate that the strategy is working.
However, In Q1 2025, Newsmax's audience grew by 50% year over year to 33. However, 6 million viewers.
The news company's management has also landed distribution deals that should continue to grow its audience, in today's market environment.
Nevertheless, It inked deals with YouTube TV last year and Hulu+ TV in May, in today's market environment.
Nevertheless, Newsmax is also a flagship channel on President Donald Trump's ing platform, Truth+.
While Newsmax is appealing to conservative viewers, some stories have landed the company in hot water, in today's market environment.
Most notably, voting systems suppliers Dominion and Smartmatic sued Newsmax for defamation regarding election fraud stories in 2020.
Moreover, Newsmax agreed to pay $40 million to Smartmatic last year, but the Dominion lawsuit is still. A similar result would be another sizable hit to Newsmax's bottom line.
Newsmax stock is volatile, and being that it's a young stock, jecting where it will go from here is challenging.
The odds of an upcoming forward stock split are almost nil, and a reverse split isn't ly, barring a serious decline (noteworthy indeed), considering recent developments.
Meanwhile, It could rebound if it's able to start shrinking its losses and if it avoids further legal issues, but it's not a company I'd invest in at the moment (something worth watching), in this volatile climate.